AKRON—Goodyear reported a net loss of $58 million for the first quarter 2014 that the firm attributes mostly to an after-tax foreign currency exchange charge related to the firm's business in Venezuela.
Sales revenue fell 7.9 percent to $4.47 billion on the negative effects of currency exchange losses and a lower price/mix ratio along with a $202 million drop in sales in the tire-related businesses, most notably third-party chemical sales in North America, Goodyear said.
The company reported 24-percent higher segment operating income of $373 million.
“Our segment operating income growth demonstrates our strategy is working and continues to deliver sustainable results,” said Chairman and CEO Richard Kramer. “Despite the Venezuelan charge in the quarter, our operating results remained strong and in line with our expectations and we are reaffirming our 2014-2016 financial targets.”
Kramer said the Akron-based tire manufacturer delivered a solid performance in its developed markets led by North America, which reported a 22.8 percent increase in operating earnings.
“Growth in North America and Europe offset headwinds in emerging markets where we continue to navigate foreign currency and economic challenges,” he said.
Other negative factors influencing sales were $126 million in unfavorable foreign currency translation and $98 million in lower price/mix, principally due to lower raw material costs. Offsetting these partially were $44 million in higher tire unit volumes.
Tire unit volumes totaled 40 million, up 1 percent from 2013. Original equipment unit volume was down 2 percent. Replacement tire shipments were up 3 percent.
“We remain confident in our full-year expectation of 2- to 3-percent year-over-year volume growth, despite the negative impact of severe January winter weather in North America and labor and economic disruptions in Venezuela during the quarter,” Kramer said.
Sales in North America fell 13.3 percent from last year to $1.88 billion. The decline reflected a 1.4-percent drop in unit volume, Goodyear said, mainly related to adverse winter weather conditions; lower price/mix; and a $201 million decline in sales in other tire-related businesses, most notably third-party chemical sales.
Original equipment unit volume was down 5 percent. Replacement tire volume remained flat.